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UPDATED FOR 2026: New Nanny Tax Changes Every Household Employer Must Know

If you employ a nanny, babysitter, caregiver, housekeeper, or other domestic worker in your home, there are some important 2026 nanny tax changes you need to understand. These affect whether you must pay nanny taxes, how much you owe, and your reporting obligations.

The Nanny Tax Threshold Has Increased for 2026

For the 2026 tax year, the domestic employee coverage threshold — often called the “nanny tax threshold” — has increased to $3,000. This means:

If you pay a household employee $3,000 or more in cash wages during 2026, you are a household employer and must pay Social Security and Medicare taxes on those wages. This is up from the $2,800 threshold in 2025.

Note: Cash wages include hourly pay, salary, overtime, and bonuses — but don’t include non-cash benefits like room and board.

Income tax changes

Income tax withholding on a nanny’s behalf is still not required for household employers. But if you and your nanny have agreed to this, note that standard deduction amounts and federal income tax brackets have been updated for 2026.

The seven federal income tax rates remain the same, but the amount of income required to reach each higher rate has increased again for 2026 due to inflation adjustments. This generally results in slightly less federal income tax being withheld for taxpayers whose earnings fall near a bracket threshold.

Some states have also adjusted their state income tax brackets and standard deductions for 2026, which may impact household payroll withholding at the state level.

IRS mileage rate

In 2026, the IRS mileage reimbursement rate has increased to 72.5 cents per mile from 70 cents per mile in 2025. For a nanny or other household employee, reimbursing mileage driven while on the job is not a federal requirement. However, some states — including California, Illinois, and Massachusetts — require reimbursement if the employee must use their own vehicle for work-related duties.

In other states, mileage reimbursement may still be offered as an optional benefit or perk if you choose.

Family Leave updates

Several states continue to adjust paid family and medical leave contribution rates for 2026.

States with annual contribution rate updates include Colorado FAMLI, New Jersey, New York, and Washington state where contribution rates for their respective family and medical leave programs have been adjusted this year.

Maine and Minnesota recently launched new paid family leave programs with continue phased implementation with updated contribution requirements in 2026.

Connecticut Paid Leave, Massachusetts, Oregon Paid Leave or Washington DC have not announced structural or contribution rate changes for 2026.

Health insurance reimbursement limits

An optional benefit that can be offered to a nanny is to provide or reimburse for health insurance. This remains an advantageous way to structure pay because it is tax-free when properly administered.

For 2026, the IRS has again increased the maximum tax-exempt reimbursement limits under a QSEHRA, reflecting annual inflation adjustments. These updated limits apply to both individual plan, which is $6,450 annually for 2026 ($6,350 for 2025) and family coverage $13,100 for 2026 ($12,800 for 2025).

Employers offering health insurance reimbursement should ensure they are using the correct limits for the year in which reimbursements are made.

SIMPLE IRA limit update

Another optional benefit is to help your nanny fund a retirement account, such as an IRA or 401(k). One type of plan, a SIMPLE IRA, continues to be well-suited for small and household employers.

For 2026, the IRS has increased the annual SIMPLE IRA contribution limits once again to $17,000 (from $16,500), including higher limits of $21,000 for employees age 50 and over. These increases reflect ongoing inflation indexing and build on the prior year’s limits.

Commuter benefit limit update

As a pre-tax benefit, household employers may allow a monthly amount to be allocated for parking or mass transit costs.

For 2026, the IRS has increased the monthly commuter benefit limit to $240/month from the 2025 level of $225/month. Leveraging this optional benefit continues to reduce taxable income for both your nanny and you, resulting in payroll tax savings when applicable.

What hasn’t changed

  • The rates of Medicare and Social Security taxes remain unchanged from last year.
  • It is still tax evasion to avoid responsibilities if you do meet the requirements to be considered a household employer.

Download the Paycheck Nanny app for iOS to automatically calculate taxes and withholdings, track time, create & email pay statements.

Filing for 2025

These changes go into effect started in wages paid in 2026.  For 2025’s tax return, the 2025 brackets will continue to be used.  And if you have a nanny or other household employee, you would still create and file a W-2 for each employee by January 31, 2026.

FAQ: 2026 Nanny Taxes

Do I have to pay nanny taxes in 2026?

Yes, if you pay a household employee $3,000 or more in cash wages during the year.

What is the nanny tax threshold for 2026?

The threshold is $3,000, up from $2,800 in 2025.

When are W-2s due for household employees?

W-2s must be provided and filed by January 31 for the prior year.

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How do I create a W2 for my nanny?

You can generate Form W-2 for your nanny using the online tools provided by the Social Security Administration. Filing only takes a few minutes, but must be completed by January 31, 2025 for the 2024 tax year.

Provide the document generated by the online tool to your nanny, babysitter, or other household employee. Your household employee will use this for their own tax returns.

Steps to Generate a W-2 for your nanny

  1. Gather Form I-9 your nanny completed around first day of employment. You will need this for your employee’s SSN and home address.
  2. Go to the online tool found at http://www.socialsecurity.gov/employer/.
  3. Click on the button to Log in to Business Services Online (or Register if you have not done so previously).
  4. Follow the instructions to report Wages to Social Security, and Create Forms W-2/W-3.
  5. Enter the information requested by the Social Security website
  6. Download the completed Form W-2, and provide this to your nanny for her own tax return.

What to enter in each W-2 box

Boxes a – f  Employee and Employer identification info

Enter name, addresses, and other information to identify you and your nanny in Boxes a, b, c, e, and f. Box d will be left blank.

You can find your employee’s SSN and home address on Form I-9 that your nanny completed around first day of employment.

Box 1  

The amount you need to enter into Box 1 is listed as Taxable wages on the Paycheck Nanny app.

This includes regular, overtime, bonus or other taxable pay for your nanny. If you are paying all of the FICA taxes on your nanny’s behalf, instead of withholding half of total Social Security and Medicare from their paycheck, the employee portion of FICA is also included in this amount.  

This does not include SIMPLE IRA retirement plan contributions, Health Insurance benefits, or Commuter benefits for parking or mass transit costs.

Box 2  

Enter in the amount of federal income tax withheld. If you did not withhold  income tax from your employee’s paycheck, this will be 0.

Box 3  

Social Security wages is often the the same as the Taxable Wages specified in Box 1. 

One exception is if you as the employer also pay the employee’s portion of FICA for them. In this case, Box 1 value will be greater than Box 3.  This extra employee portion of FICA paid by you should be included in Box 1 but not Boxes 3 or 5. 

Another exception is if participating in a SIMPLE IRA retirement plan, your nanny’s contributions are included as Social Security and Medicare wages, but not taxable wages in box 1.

Box 4  

Enter the amount of Social Security tax withheld from your employee’s paycheck.

Don’t worry about the employer portion when creating a W-2.  That will come into play when you file form Schedule H with your own tax return.

Box 5  

The Medicare wages will be the same as Box 3, as long as your nanny has earned less than $168,600 in 2024 from you, which is the cap on Social Security wage base but not Medicare. 

Box 6  

Enter the amount of Medicare tax withheld from your employee’s paycheck.

Don’t worry about the employer portion for creating a W-2.  That will come into play when you file form Schedule H with your own tax return.

Box 12

If you employee has contributed to a SIMPLE IRA, specify the employee’s total contribution with code S. Note that any employer contribution to the SIMPLE IRA is not included on Form W-2.

If you have reimbursed Health Insurance costs for your nanny, enter the available amount in Box 12 with code FF, which is reserved for QSEHRA (Qualified Small Employer Health Reimbursement Arrangement) benefits. Note that the amount available should be entered here, even if the employee did not request reimbursement of the entire amount.

Box 13 Retirement Plan

Check the Retirement Plan box if your nanny has SIMPLE IRA or other retirement plan contributions.

Box 14 Other

This box is used to provide record of additional employee paid taxes, such as Disability or Family Leave taxes for states that have those. Employees who itemize deductions on their tax returns may be able to deduct these amounts from their income tax liability.

California: Enter in the amount withheld from your employee’s paycheck  to CA State Disability Insurance Tax as “CA SDI”

Massachusetts: Indicate the employee paid portion of Family Medical Leave contributions with Description of “MAPFML”.

New Jersey: Worker contributions for UI, SDI, and Family leave should be indicated following NJ W-2 guidance.

New York: Include employee contribution of SDI as “NY SDI”. Also indicate the Employee contribution of “NY Paid Family Leave”.

Rhode Island: Include employee contribution of SDI as “RI SDI”

Washington: While WA also has a Paid Family & Medical Leave program, it does not have a state income tax (for the employee to potentially deduct this amount from).  So employee paid portions of this can be added as an FYI, but the WA Paid Family & Medical W2 Leave guidance does not specify it as required.

Box 15    Employer’s 

Enter the abbreviation for the state of employment. For the ID, enter in your state issued Employer ID if your state has issued you one. Otherwise, re-enter your federal EIN.

Box 16 State wages, tips, etc.

If your state has a state income tax, enter in the taxable wages the state will consider. In most cases, this is the same amount as in Box 1.

Leave this blank if your state does not have an income tax.

Box 17

Enter in the amount of state income tax withheld. Leave this blank if you did not withhold any state income tax from your employee’s paycheck.

Box 18 Local wages, tips, etc.

If your locality has local income tax, in addition to the state income tax, enter in the taxable wages the state will consider. In most cases, this is the same amount as in Box 1.

Leave this blank if your city is not subject to additional local income tax.

Box 19 Local income tax

Enter in the amount of any local income tax withheld. Leave this blank if you did not withhold any state income tax from your employee’s paycheck.

Box 20 Locality name

Enter in the locality name for local income tax, if applicable.

W-2 FAQs

What else do I need to do for tax time?

With your own tax return, you will need to include form Schedule H and remit taxes withheld and owed at that time.

For a full checklist of how to pay your nanny legally, see here.  This information and more is also included in the Paycheck Nanny app for Android and the Paycheck Nanny app for iOS.

Thinking About a Nanny Share? Here’s What Parents Should Know Before You Start

Finding the right childcare solution can feel like a full-time job, especially when you’re balancing budgets, schedules, and what’s best for your little one. One increasingly popular option for families is a nanny share, where two (or sometimes more) families share the services, and cost, of a single nanny.

It can be a win-win: the nanny earns a higher hourly rate than they would caring for just one family, while each family pays less than they would for a private nanny. The kids get built-in playmates, and parents get trusted, flexible care at a more manageable price.

But before you dive in, here are key things to consider to make your nanny share a happy and sustainable arrangement for everyone involved.

1. Align on Values and Parenting Styles

A nanny share works best when both families are on the same page about the big stuff — routines, discipline, nap schedules, screen time, meals, and the day-to-day rhythm of your kids’ lives.

Before hiring anyone, have an open, honest conversation with the other family about your parenting philosophies. It’s easier to work out differences now than to navigate them after the nanny has started.

2. Decide on the Logistics Early

Some key questions to settle:

  • Where will care take place? Will it alternate between homes, or always be in one location?
  • What’s the daily schedule? Make sure both families agree on drop-off and pick-up times.
  • Who provides what? Think high chairs, strollers, snacks, car seats, and even baby wipes.

Writing these details down helps avoid misunderstandings later.

3. Nail Down the Financial Details

Important financial details to discuss include:

  • The nanny’s hourly rate and how it will be split.
  • How overtime, holidays, and paid time off will be handled.
  • Who’s the employer of record for tax purposes (one family, or each family separately?). The cleanest way to go about this is that each family separately employs the nanny.

Each family should understand their household employer responsibilities, including payroll taxes and any benefits. The Paycheck Nanny app can make it simple to calculate take-home pay, taxes, and overtime for your nanny share arrangement.

4. Put It in Writing

Even among close friends, a written agreement keeps expectations clear and relationships strong. A solid nanny share agreement should include:

  • Work hours and pay details
  • Duties and responsibilities
  • Vacation, sick time, and holidays
  • Termination and notice periods
  • Illness and emergency policies

You can start with a simple template and tailor it to your situation. Below is an example nanny share agreement as a starting point.

Nanny_Share_Agreement_TemplateDownload

5. Prioritize Communication

Nanny shares thrive when everyone stays connected. Set up a shared group chat or weekly check-in between both families and the nanny to discuss schedules, routines, and any concerns.

Regular communication helps small issues stay small and shows your nanny that you value her perspective.

6. Treat Your Nanny Like the Professional She Is

A nanny share is still a professional arrangement. Make sure your nanny receives fair pay for caring for multiple children, and that expectations are clear about what’s included in her role. Provide paid vacation, sick leave, and holiday pay whenever possible. It’s not only fair but also improves retention and morale.

Final Thoughts

A nanny share can be a wonderful childcare solution. It can save money, create lasting friendships, and give your kids a caring, social environment.

Take time upfront to align with your partner family, treat your nanny well, and put it all in writing and you’ll be setting up your nanny share for success.

Bonus Tip: Simplify Payroll with the Paycheck Nanny App

Keeping track of hours, overtime, and taxes can be the hardest part of managing a nanny share. The Paycheck Nanny app helps parents calculate paychecks, taxes, and take-home pay instantly — no spreadsheets required.

Whether you’re the primary employer or sharing costs with another family, Paycheck Nanny takes the guesswork out of paying your nanny legally.

Dependent Care Receipt

Parent / Guardian: ____________________________________

Name of Person providing Child Care: _________________________

Provider Address: ____________________________________

Provider SS# / Tax ID#: _________________________________

For Dependent(s): ____________________________________

Start DateEnd DatePayment Amount





Total Payment(s): $ ___________

Signature of Provider certifying above information is accurate:

________________________________ Date: __________________

Kentucky local income tax rates

On top of Kentucky’s state flat income tax rate of 4.0 in 2024, some of its counties and cities also impose an additional local tax. Kentucky refers to these as Occupational License Fees/Taxes, and these apply to all employees, including household employees.

Each city has its own requirements and method to pay. For example, Louisville Metro has combined taxes totaling 2.2% for employees who work and live there or a 1.45% tax rate for non-resident employees. This amount is withheld from an employee’s paycheck, and then remitted to the city quarterly by employer by the following dates.

April 30
July 31
October 31
January 31

This can be paid online or mailed in, with details for Louisville local tax instructions can be found on the city’s website.

How to Pay Nanny Taxes in California

Paying nanny taxes in California includes payment to the IRS for federal taxes as well as payments to California’s Employee Development Department (EDD).

Initial Setup

  1. Register online for a Federal EIN (Employment Identification Number).
  2. Create an account with California EDD, which will be used for California specific filings. Use the “Enroll” button under e-Services for Business to create a user name and password.
  3. Once you have paid $750 or more in a quarter, you must register with the state of California for an Employer Payroll Tax Account Number. To do log in using your e-Services username and password created in the previous step.
  • For “Reason for Application”, select “New Hire”. The following page will prompt you for “Employment Type”, where you can select “Household”.
  • If you plan to pay $20,000 or less a year to all employees, you can elect to pay once a year, rather than quarterly. In this case you will be considered an “Annual Payer” rather than a “Quarterly Payer”

4. If you and your nanny agree to withhold income tax, have your nanny fill out forms W-4  and DE 4 for withholding elections.

5. Register online with the Social Security Administration. This will be needed to create a W-2 for your nanny in January.

6. Form I-9 is used to verify that your nanny is legally able to work in the US. You do not need to submit this form but must retain it in your records.

Each pay period

Each pay period the person you need to pay is your nanny. Pay her the Net pay amount via cash, check, or direct payment initiated from your bank.

The taxes will be remitted quarterly or annually.

Paying California Taxes

Report wages and California taxes quarterly and pay online using e-Services for Business.

AprilReport wages and taxes for Jan – March by April 30.
If you are a quarterly payer, you will also pay at this time.
JulyReport wages and taxes for April – Jun by July 31.
If you are a quarterly payer, you will also pay at this time.
OctoberReport wages and taxes for July – Sept by Oct 31.
If you are a quarterly payer, you will also pay at this time. 
JanuaryReport wages and taxes and pay for Oct – Dec by Jan 31.
Both quarterly and annual payers will pay at this time. 

The CA taxes are SDI (State Disability Insurance), ETT (Employment Training Tax), UI (Unemployment Insurance, shown as SUTA on pay statement), and PIT (Personal income tax, shown as CA Income Tax).

For quarters that you do not have wages, you must still file the report. You can close your account if you no longer plan to have any employees.

Paying Federal Taxes

The federal taxes are Social Security, Medicare, Federal Unemployment (FUTA), plus any income tax withheld from your nanny’s pay.

The balance of those federal taxes is paid with your personal income tax return due April 15, by adding Form Schedule H.

However, if the amount of taxes to be owed over the course of the year is greater than $1,000, you should pre-pay the IRS along the way to avoid a tax underpayment penalty. There are a couple of ways to do this:

Option 1 – Update your withholding: If you are a W-2 employee, you can update your own W-4 election with your employer to have the additional tax amount withheld from your pay.

  • For the example pay statement in the previous section, the household employer can request an additional $63 (employee + employer portion of SS and medicare + federal income tax withheld) withheld each week from their pay. This amount gets paid to the IRS on their behalf by their employer.

Option 2 – Pay Estimated Taxes quarterly: You can alternatively make Quarterly Estimated Payments to the IRS yourself by April 15, June 17, September 16, and January 15. The DirectPay option allows you to quickly pay without creating an account, while creating an account will allow you to track previous payments. EFTPS is another option geared toward businesses but also can be used by individuals who wish to schedule all payments for the year.

Note that the amounts pre-paid are a best estimate. Form Schedule H will determine the exact amount owed and reconcile any differences.

Annual – Creating a W-2 for your nanny

As a household employer, you will need to provide your nanny with a W-2 by January 31 for the prior tax year.

A W-2 can be created and filed using the online tools from the Social Security Administration, which will contain both the federal and state information she will need in her own tax return.

Details on how to fill out Form W-2 is found here.

Worker’s Compensation Insurance

California requires employers to carry Workers’ Compensation insurance. This is separate than CA and federal taxes, and not reflected on the pay statement.

Follow the payment schedule required from your insurance provider for this.

How to provide health insurance perks for nanny to benefit you both

A lesser known perk which can help save money in taxes for both a household employer and nanny is to provide or reimburse for health insurance.

Given the same amount of money paid to a nanny, allocating a portion toward health costs (which your nanny would be paying anyway), will result in these tax saving benefits, saving you both money!

  • lower Medicare and Social Security taxes owed by nanny
  • lower income taxes owed by the nanny
  • lower Medicare and Social Security taxes owed by employer
  • lower Unemployment taxes owed by employer

Household employers are not required to pay for a nanny’s health insurance. However, you should consider this perk to benefit you both.

There are 2 ways to offer this benefit:

Option 1: Reimbursing for a nanny purchased Health Insurance plan

One option where the nanny purchases their own health insurance and is reimbursed for some or all expenses by you.

With QSEHRA (Qualified Small Employer Health Reimbursement Arrangement), the tax-exempt limit is $6,150 annually for 2024 for individual coverage and $12,450 for a family plan, prorated for partial year employment.

This is an appealing option for a few reasons. If she chooses her plan, she can pick the one that best matches her needs. Additionally, after her employment with you ends, she can continue with the same health insurance and not have to change plans.

With reimbursement method, ask your nanny for initial proof and monthly statements. You do not need to submit these anywhere, but retain these in case of an audit.

Option 2: Purchasing Health insurance

An alternate strategy is to purchase health insurance as an employer and provide it as an option to your employees.

In this scenario, purchase the insurance via SHOP (Small Business Health Options Program) to become eligible for tax credits.

Setting up

When offering this benefit, detail it in writing, such as in an addition to her nanny contract.

To set up in the Paycheck Nanny iOS app, use the ‘Health Insurance’ field on the Employee Setup to pre-populate this amount on the Time Card when ‘Extra pay’ is chosen.

Yearly tasks

When creating a W-2 for your nanny each year by January 31, you will enter the available benefits into Box 12 with code FF. This amount is not taxable, but is provided for informational purposes.

The limits for reimbursement have grown each year. So review your benefit amount offered each calendar year if you wish to increase the benefits.

Disability or Family Leave taxes

Some states have State Disability Insurance (SDI) or Family Leave contribution requirements. These additional taxes fund programs which can provide monetary benefits to your nanny if they have a qualifying life event.

California

CA requires employee contribution of SDI. Alternatively, it is allowed for employers to pay this for their employees.

CA SDI covers both Disability and Paid Family Leave claims.

Colorado

Colorado requires contribution to Family and Medical Leave Insurance Program (FAMLI) at a rate of .45% for small employers. Alternatively, it is allowed for employers to pay this on their employee’s behalf.

Total premiums must be remitted on a quarterly basis at https://famli.colorado.gov.

Connecticut

Connecticut requires contribution to CT Paid Leave at a rate of .5% for small employers. Alternatively, it is allowed for employers to pay this on their employee’s behalf.

Total premiums must be remitted on a quarterly basis at https://ctpaidleave.org

District of Columbia

DC requires employer funded contribution of Paid Family and Medical Leave at a rate of .26% in 2024.

Total premiums must be remitted on a quarterly basis at https://does.dc.gov/page/dc-paid-family-leave.

Massachusetts

MA requires contribution of Paid Family & Medical Leave, withheld from your nanny’s paycheck.  Alternatively, it is allowed for employers to pay this on their employee’s behalf.

The rate is 0.46% for small employers in 2024. Total premiums must be remitted on a quarterly basis though the mass.gov website at https://www.mass.gov/paid-family-and-medical-leave-information-for-massachusetts-employers.

New Jersey

NJ has temporary Disability and Family Leave contribution requirements. See https://nj.gov/labor/myleavebenefits/employer/index.shtml for details.

New York

New York requires employee contribution of State Disability Insurance (SDI).

NY also requires employee contribution of Family Leave for those who work 20+ hours / week and 175 days a year.

Alternatively, it is allowed for employers to pay this for their employees. 

Employers also need insurance covering Family Leave.
http://www.wcb.ny.gov/content/main/forms/PFLDocs/PFL-Employer-Fact-Sheet.pdf.

Oregon

OR requires employee contribution of Paid Family & Medical Leave rate at a rate of 0.6% for small employers. 

Alternatively, it is allowed for employers to pay this on their employee’s behalf.

See https://paidleave.oregon.gov/employers-overview/ for details.

Rhode Island

Rhode Island requires employee contribution of SDI. Or employers can pay this for their employees. 

See Employer responsibilities at https://dlt.ri.gov/individuals/temporary-disability-caregiver-insurance/employers.

Washington

WA requires contribution of Paid Family & Medical Leave. Alternatively, it is allowed for employers to pay this on their employee’s behalf.

The rate is 0.528582% for small employers in 2024. Total premiums must be remitted on a quarterly basis. See WA Paid Family & Medical W2 Leave guidance for details.

Withheld and Estimated Taxes

If you are employing a nanny or caregiver, each pay period you may be withholding taxes, such as Social Security, Medicare, or income tax from your employee’s paycheck.

So what do I do with the withheld taxes?

As a household employer, you must pay these taxes to the IRS in one or more of the following ways:

  1. (If needed) Have a similar amount withheld from your own paycheck, which your employer will pay to the IRS.
  2. (If needed) Pre-pay estimated amount via quarterly Estimated Taxes.
  3. (Always needed) Reconcile final amount in your own yearly Tax return.

Option 3 above is necessary in all cases of household employment where taxes are owed. The final amount is calculated via Form Schedule H which should be included in your usual yearly tax return.

Note some states additionally have state specific taxes that need to be paid directly to the state, typically each quarter.

In what cases do I need to also pay taxes ahead of my yearly tax return?

Options 1 or 2 are necessary in cases where the amount of taxes withheld would cause your tax owed to the IRS with your yearly Tax return to be $1,000 or more that you have not yet paid.

As an example, if your summer time nanny will gross $6,000 from you, the amount of Social Security plus Medicare tax withheld would be $459, and your share of employer taxes would be similar. Say she has $0 federal income tax withheld because her income is not high enough. In this case, you could solely pay the taxes in a lump sum with your yearly tax return.

Now, if you also hire another nanny during the school year who makes $5,000 for care after school and during school vacations. The combined taxes withheld for the year will be greater than $1,000. In this case, the IRS will want that money paid prior to your yearly tax return.

Option 1: Extra withholding

If you’ve determined that more than $1,000 would be owed, there are two options to pay this during the year.

If you (or your spouse if filing jointly) are a W-2 employee, you likely are already getting taxes withheld from your paycheck by your employer. In this case, an easy option is to request your employer withhold an extra amount each paycheck to account for this money, and they will then pay this amount to the IRS on your behalf. Do this by requesting to update Form W-4, Employee’s Withholding Certificate, with your employer at any time of year.

If your nanny’s pay fluctuates each week and you do not know the exact amount of tax that will be paid, that is ok. You will still finalize any additional amount owed or overpaid during the year when you file your yearly tax return.

Option 2: Estimated Taxes paid quarterly

The alternative option if you will owe more than $1,000 in taxes is to pay Estimated Taxes quarterly. This is paid directly to the IRS, due on the following dates.

  • April 15, 2024
  • June 17, 2024
  • Sept. 16, 2024
  • Jan. 15, 2025

Estimated Tax Payment can be made online via any of the options at https://www.irs.gov/payments. The DirectPay option allows you to quickly pay without creating an account, while creating an account will allow you to track previous payments. EFTPS is another option geared toward businesses but also can be used by individuals who wish to schedule all payments for the year.

The full IRS guide to Estimated taxes can be found at:

https://www.irs.gov/forms-pubs/form-1040-es-estimated-tax-for-individuals

Forms you need to file after hiring a nanny

If you plan to pay your nanny $2,400 or more in 2022, in most cases you are considered to be a household employer. While this comes with extra benefits to you and your nanny, it comes with some extra paperwork.

A full service payroll provider can file these forms on your behalf for a price.

But if you are not interested in paying the extra price of a nanny payroll provider, you can do it yourself. All of these forms are free and easy to file.

1. I-9 Form

Time to complete: 15 mins. Cost: Free

Form I-9 is used to verify that your nanny is legally able to work in the US. First, print out an I-9 form for your nanny to fill out after accepting the job offer but no later than the first day of work.

This form indicates documentation you as an employer need to inspect (Drivers license, SS Card, etc). You do not need to submit this form but must retain it in your records.

2. Employer Identification Number (EIN)

Time to complete: 15 mins. Cost: Free

Follow the instructions on the IRS website to register as a Household Employer. The IRS will give you your EIN immediately after verification. This EIN will be used for tax purposes.

3. New hire report with your state

Time to complete: 15 mins. Cost: Free

As another quick task you can complete on your own, file a New Hire Report with the New Hire Registry for your state.

The list of New Hires is used by agencies operating child support, unemployment programs, and workers’ compensation services.

4. Nanny Contract

Time to complete: 1 hour. Cost: Free, or purchase a template

A written Employment Contract, also known as a Nanny Contract, can clarify expectations and avoid conflicts. It should include things such as hourly and overtime pay rates, pay frequency, taxes withheld, daily duties and other expectations, PTO, and required leave notice.

5. Other State Specific Forms

Time to complete: 1 hour. Cost: Free

Depending on your state, you may also be responsible for other state employment taxes, such as State Unemployment Tax.

Next steps

After the forms are filed, there are also weekly tasks to track hours worked and calculate taxes and how much to pay your nanny. The Paycheck Nanny app helps with these tasks and provides guidance in navigating nanny taxes. Find it in the Play Store for Android devices or the App store for your iPhone and iPad.